Lake Tekapo, a renowned stargazing destination in New Zealand’s South Island, is facing an accommodation crisis as a surge in international tourists, particularly over the Lunar New Year, strains limited lodging options and drives prices to levels some are calling exploitative.
Reports from tourists and local business operators indicate that finding accommodation in the small lakeside town has become increasingly difficult, with prices soaring to as much as $2400 NZD (approximately $1500 USD) per night for some properties. The influx of visitors, coinciding with China’s Spring Festival holiday from February 15-23, has exposed vulnerabilities in the region’s infrastructure and sparked concerns about the long-term sustainability of tourism in the area.
Xiaoyang Lu, a tourist from Shanghai traveling around the South Island, described her difficulty securing lodging in Lake Tekapo. “There were remarkably few rooms available in Lake Tekapo,” Lu said. “A lot of people booked six months earlier. When I booked two months ago, there were only a few left and prices had skyrocketed.” She ultimately shared a holiday home with other tourists, paying approximately $400 NZD for a single room for one night.
Another Chinese tourist, Xiaolin Zhou, who traveled from Dongguan and Shenzhen, echoed Lu’s experience. “Accommodation was extremely difficult to book,” Zhou stated. “The most difficult places were Wānaka and Tekapo. It was almost impossible to book hotels or bed and breakfasts in either town.” Zhou and her travel companions were forced to stay in nearby towns like Twizel and Fairlie, adding to the inconvenience of their trip.
The price increases are not solely impacting tourists. Jared Simcox, managing director of High Country Hospitality, which operates The Godley Hotel in Lake Tekapo, noted that his hotel has been fully booked from mid-December through Easter. While acknowledging the limited supply and high demand as contributing factors, Simcox expressed concern over the practices of some third-party operators. “What they’re doing, in some cases, is marking those rates up to two or three times the wholesale rate and redistributing them online overseas,” he said. “We’ve actually asked that this behaviour stop because we don’t think it’s a fair representation of our product, and we also think it offers poor value.”
Simcox pointed to dynamic pricing structures, driven by algorithms that track availability and adjust rates accordingly, as exacerbating the problem. “The problem with that is you can have a scenario where a one-bedroom studio or flat is $1000 a night because the computer doesn’t know when to stop,” he explained. “The risk is that people will start to see Lake Tekapo as poor value, and they’ll stop coming.”
Dave Larken, manager of Grand Suites Lake Tekapo, shared similar concerns, describing some short-term rental owners’ pricing as “daylight robbery.” He emphasized that his accommodation maintains stable rates throughout the year, but acknowledged the issue with other operators capitalizing on peak demand.
Beyond accommodation, local infrastructure is struggling to cope with the increased visitor numbers. Simcox highlighted issues with roads, parking, and the capacity of restaurants and retail services. “Our roads aren’t designed to handle that volume. We don’t have anywhere for people to park… we don’t have enough restaurants to support that kind of demand,” he said.
Jessica Frewen, operations manager at Discover Tekapo, acknowledged the strain on infrastructure, particularly regarding rubbish collection, public toilets, and commercial property availability. While she doesn’t believe Lake Tekapo has reached a point of overtourism, she noted the pressure on supporting services.
The Mackenzie District Council confirmed that the region has experienced strong demand from October through April, exceeding pre-COVID levels, particularly during the summer months. A council survey last year indicated that residents value the economic benefits of tourism but are concerned about its negative impacts. The council spokesperson stated that infrastructure upgrades, such as a new wastewater treatment plant and increased housing for workers, are unaffordable for local ratepayers alone.
The council is advocating for sustainable funding mechanisms, including a local visitor levy and the proper allocation of funds from the international visitor levy. “Increasing accommodation supply for visitors needs to be matched by an increase in housing supply for the community to service the businesses hosting visitors,” the spokesperson added.
Tourism Minister Louise Upston stated that the government is focused on supporting sustainable tourism growth and strengthening the supply side of the sector. She announced that 40 percent of funds from the international visitor levy will be allocated to infrastructure investments to address growing demand.
